Jobs gap

Akron Beacon Journal - December 19, 2011


On Friday, John Boehner applauded the decline in Ohio’s unemployment rate last month, from 9 percent in October to 8.5 percent. The U.S. House speaker attributed the steepest month-to-month drop in 28 years to “clear signs of progress being made in the Buckeye State under the leadership of Gov. [John] Kasich.” He argued that the Kasich approach “contrasts sharply with the failed jobs policies of the Obama administration.”

Yet the national unemployment rate followed virtually the same track, dipping from 9 percent to 8.6 percent. No clear signs of progress?

Actually, neither Republicans nor Democrats should be pleased. The jobless numbers deserve context. As Policy Matters Ohio noted, the state story differs little from what is happening at the national level. The Cleveland-based think tank argued in an analysis, “Nothing to crow about,” that the decline in the unemployment rate reflects, to a large degree, workers exiting the labor force, abandoning the search for a job.

The state Department of Job and Family Services pointed to the addition of just 6,000 jobs in November. The number of people reported as being employed climbed by 7,000. At the same time, 22,000 Ohioans left the labor force, the largest monthly decline this year.

As Policy Matters Ohio explained, the November jobless number reflects 30,000 Ohioans moving out of unemployment. Two-thirds of those have given up their job search, and no longer count as part of the work force. In addition, it is worth stressing that since the end of the harsh recession in June 2009, the state has experienced a weak 1.2 percent rate of job growth, This past year, the pace has been a slower 0.9 percent.

In 2010, 65.2 percent of working age Ohioans were working or actively looking for work. Today, the labor force participation rate is 64.7 percent.

To his credit, the governor highlighted that “we have a lot of progress yet to make.” How much is “a lot”? Consider that at the start of the recession, 5.4 million Ohioans were employed. The current number is roughly 5.1 million. Return to 2000, or the eve of the previous recession, and more than 5.6 million Ohioans had jobs. The state has yet to recover from either recession.

No question, the governor has been hustling, looking to attract and retain employers with tax relief and other incentives. He rightly wants to take a regional approach to economic development. At the Statehouse, the expectation is, he will call for further tax cuts. What worries in view of the large task is the lack of evidence that more tax cuts deliver. If anything, public investment provides a foundation for private growth. Yet in something as important as education, the governor already has taken a big whack. Hard to believe Ohio can make up its jobs deficit without investing sufficiently in its people or the services that support business.

Jobs gap (editorial)

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